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Quiz 3 - 2

The document is an examination paper for a Certificate in Accounting and Finance, focusing on tax practices. It includes four questions that require candidates to compute taxable income for individuals based on provided financial details and tax regulations. Each question addresses different scenarios involving income, benefits, and tax implications for the individuals mentioned.

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tariqtunio02
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4 views3 pages

Quiz 3 - 2

The document is an examination paper for a Certificate in Accounting and Finance, focusing on tax practices. It includes four questions that require candidates to compute taxable income for individuals based on provided financial details and tax regulations. Each question addresses different scenarios involving income, benefits, and tax implications for the individuals mentioned.

Uploaded by

tariqtunio02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Certificate in Accounting and Finance Stage Examination

02nd June 2025


50 minutes – 30 marks
Reading time – 10 minutes

Tax Practices
Quiz 3 by Sir Tariq Tunio

Instructions to examinees:
(i) Answer all Four questions.
(ii) Answer in black pen only.

Q1
Rizwan Yousuf resigned from Infinity Engineering Limited on 31 August 2024 after 8 years of
service. The following details relate to his income and benefits received during the tax year
ending 30 June 2025:

Rs.
Basic salary per month 200,000
Fuel allowance per month 15,000

Final Settlement and Benefits:


1. Leave encashment received on retirement Rs. 450,000.
2. Received Rs. 1,500,000 Gratuity from an approved scheme. Scheme is applicable to all
employees & is approved by the Board.
3. Recognized Provident Fund (RPF) payout:
(i) Employer Contribution Rs. 1,200,000
(ii) Interest credited Rs. 300,000
4. Company waived Rs. 600,000 of interest-free loan outstanding at the time of resignation.
5. Received a laptop as farewell gift worth Rs. 90,000.
6. Rizwan purchased a company maintained car which was provided to him for official and
private use at a cost of Rs 1,000,000. Fair market value (FMV) of car on 31 July 2024 was Rs.
4,000,000. Cost of the car was Rs. 2,500,000 at the time of purchase and Rizwan was using
it 50% personally.
7. Medical allowance paid monthly Rs. 70,000.
8. Company provided medical benefit coverage for his family up to Rs. 450,000.

Premium paid Rs. 90,000


Hospital expense claim Rs. 400,000

9. Received performance bonus of Rs. 900,000 in July 2024.


10. Utility Bills Reimbursement Rs. 120,000 for the year.
11. Purchased another old company vehicle at Rs. 600,000. Fair market value of this vehicle on
the date of transfer was Rs. 1,500,000.

STT SOLUTIONS Address: BASEMEST, F-45, BLOCK 6, PECHS, BEHIND FORTUNE CENTRE MAIN SHARA-E- FAISAL, KARACHI.
Phone No: +92 347 2655906
Required: Under the provisions of the Income Tax Ordinance, 2001 and the Rules made
thereunder, Compute the taxable income of Rizwan Yousuf for the tax year 2025. (11 marks)

Q.2 Muneeba Shaikh joined Optix Solutions (Private) Limited as a Technical Director on 1 July 2023.
The following relates to her emoluments and perquisites for the year ended 30 June 2024:

Rs.
Basic monthly salary 250,000
Annual Medical allowance 550,000

Benefits & Perquisites:


▪ Company provided a rent free furnished residential house (owned by employer).
Fair market rent per month is Rs. 120,000.
▪ Company-maintained car is provided, used 70% for official and 30% for personal
purposes. Fair market value of car Rs. 3,500,000 at the time of lease.
▪ Company provided 300 liters of fuel per month & average petrol cost is Rs.
250/liter.
▪ Leave encashment Rs. 400,000 received on encashment of 45 days unused leave.
▪ Due to inflation in March 2024, received ad-hoc relief allowance of one month’s
basic salary.
▪ Performance-based bonus of Rs. 1,200,000 was credited to her account in June
2025.
▪ Received gold bracelet worth Rs. 120,000 from company as a recognition gift.
▪ Purchased company-owned laptop at book value of Rs. 40,000 & its Fair market
value on date of transfer is Rs. 95,000.

Other information:
(i) Prior to joining Optix Solutions, Muneeba worked at Hydro Energy Ltd an associate
company of Optix Solution, started receiving a monthly pension of Rs. 40,000 from
1 August 2023.

(ii) During the year, Muneeba sold 75,000 shares of her ex-employer, Nova Tech Paints
Limited (NPL), a listed company, at Rs. 90 per share net of expenses. These shares
were issued to her in tax year 2021 under an Employee Share Scheme at Rs. 20 per
share. Fair market value of the shares at the time of issuance was Rs. 35 per share.

(iii) During the year, Muneeba paid Rs. 150,000 as zakat directly to his cousin, who is
financially dependent and living below the poverty line.

Required: Under the provisions of the Income Tax Ordinance, 2001 and the Rules made
thereunder, compute under the correct head of income, the taxable income of Muneeba Shaikh
for the tax year 2024. (12 marks)

STT SOLUTIONS Address: BASEMEST, F-45, BLOCK 6, PECHS, BEHIND FORTUNE CENTRE MAIN SHARA-E- FAISAL, KARACHI.
Phone No: +92 347 2655906
Q.3 Mr. Hassan is the proprietor of a manufacturing unit and earns income from business.
The following information pertains to the tax year 2023.
Rupees
Gross Sales 13,000,000
Cost of Sales 7,800,000
Administrative and Selling Expenses 3,200,000

Additional information:
During the year, Mr. Hassan sold a production asset – machinery for Rs. 1,900,000.
The original cost of the machinery was Rs. 3,800,000, and the total depreciation charged on
it up to the date of disposal was Rs. 3,400,000.

Required: Calculate income under the correct head of income for the Tax Year 2023. (03 marks)

Q.4 Ahmed, a citizen of Pakistan, is employed by a multinational logistics company based in Germany.
The following details outline Ahmed’s travel and work assignments across different countries
during the tax year 2025:

Description Rs. in million


1 Jul – 20 Oct 2024 Germany
21 Oct – 31 Dec 2024 Saudi Arabia
1 Jan – 28 Jan 2025 Pakistan (On vacation)
29 Jan – 5 Mar 2025 Germany
6 Mar – 30 Jun 2025 Pakistan (Work from home)

Required: Under the provisions of the Income Tax Ordinance, 2001 and the Rules made
thereunder, assess the residential status of Ahmed for the tax year 2025. (04 marks)

STT SOLUTIONS Address: BASEMEST, F-45, BLOCK 6, PECHS, BEHIND FORTUNE CENTRE MAIN SHARA-E- FAISAL, KARACHI.
Phone No: +92 347 2655906

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